Archive for June, 2009
eHow asked:
Getting a free credit score is as easy as checking on Web sites and applying online. Get a free credit score with tips from a vice president of a bank in this free video on credit counseling.
Coral Shallcross
Stylish Ladi 2 Da Maxx asked:
I could not get a car since my credit is not good enough. Does anyone know what is the actual credit score to obtain in order to purchase a used car? Specific answers would help. Please no “IDK” answers.
Tanja Legallo
I could not get a car since my credit is not good enough. Does anyone know what is the actual credit score to obtain in order to purchase a used car? Specific answers would help. Please no “IDK” answers.
Tanja Legallo
Test asked:
I heard having too many credit cards can lower your FICO score even if you pay them full each month. How many can you get before they drop your score?
I heard having too many credit cards can lower your FICO score even if you pay them full each month. How many can you get before they drop your score?
I had problem getting a credit card when I had no credit history and then after I finally got one, I had difficult time getting another one, because banks said I had “too few” revolving accounts. Now I have 5 credit cards and only 1 of them carry balance. My balance to credit ratio is 6% and my FICO score is 740.
Ambrose Bagnall
AttractiveCredit asked:
http://www.AttractiveCredit.com or call 800-605-9085 for FREE consultation. Please rate, subscribe and comment. Thanks! Visit us on our website and receive a free credit repair and restoration eCourse valued at $97 dollars FREE. Increase your credit score fast with these powerful techniques…
Carter Schlotzhauer
You need to know how credit scoring and your credit report works to get out of debt and improve your financial future. Here is what you need to know.
You may be wondering how some people can walk into a lending institution and get credit, or loans, while others that have the same income or job seem to get turned down or receive a higher interest rate. It is all about the risk factor and whether you are a safe risk, or a bad one, when you are being loaned money.
Creditors use a credit scoring system that gives them an idea of whether the person who wants to borrow money is likely to make their repayments, whether they have a history of not making repayments, or are likely to be unable to make the monthly repayments.
These credit scoring systems may go under several names. One of the most widely known credit scoring software applications is the FICO, or the Fair Isaac Corporation, and there are three variations of this software used by the three major credit reporting agencies.
What Exactly Is Credit Scoring?
Credit scoring is collected information about you and your credit history. Contained in a credit report is your bill paying history, as well as how many accounts that you already hold and what type they are. Things such as late payments, any collection actions taken against you, outstanding debts and how long you have had accounts are all considered. All of this information is compared with other consumers that fit the same profile as you to determine the type of risk that you are to the creditor.
The credit scoring system gives you points for each factor and the end result tells the creditor if you are likely to repay your debts. The total amount of your debt is then added up to give you a credit score. Your credit score is an indication on how likely you are to repay your debts and make your monthly repayments when they are due.
Find Out What What’s In Your Credit Report First – since you now know that everything in your credit report is vital to whether you are going to get the line of credit that you are applying for, it would make sense to get your credit report and take a look at what is in it.
Sometimes credit reporting agencies can make mistakes or place something on your report that is inaccurate. By checking your credit records for yourself, you can make sure that everything contained in it is true and accurate.
Before applying for anything, make sure that you obtain your credit report. An amendment in the federal fair credit reporting act now allows a consumer the opportunity to receive a free credit report when you request it, or at least each year.
You obtain your financial summary making a request to one or all of the major credit reporting agencies.
Read through your report and make sure that everything is accurate and you are happy with what has been included in the document. By reading through your report, you will also be able to see if there are good things or bad things listed on your report. This will have a bearing on whether you are likely to be given credit.
Why Credit Scoring Is Used, And Is It Fair?
Credit scoring is based on real information and statistics rather than the personal judgments of another person. Because of this, there is no variation in acceptance of a loan based on other things that are not statistically based facts. Different creditors often use different types of scoring models from agency to agency. Also, different models of the system are used for different lines of credit.
Under the equal credit opportunity act, no scoring systems are allowed to use race, sex, religion, marital status or a person’s country of origin to determine an individuals creditworthiness. Age is sometimes allowed as a scoring characteristic as long as the system is designed properly and those that are over a certain age are treated fairly and given the same opportunities as younger applicants.
If you are not given credit, or your application is denied, the creditor must provide you with the reasons why your application was rejected, either by notification, or by you asking the creditor within two months of being denied. A creditor must also give you a fair reason by law. The credit report system has been designed to make sure that creditors are as fair and objective as possible with those who are applying for financial assistance.
How To Improve Your Credit Score – credit score criterion can differ between creditors, but there are a few fundamentals that can be used to make sure that your credit is in good shape. These include things like:
-Paying your bills on time: Because your history is always taken into account when a credit score is determined, you can improve chances of acceptance by making sure that you have good statistics on paying bills and previous repayments.
-Evaluate your debts: Calculate your outstanding debts and compare them to your existing credit limits. If you are almost at capacity, consider reducing some of your debt before applying for more credit.
-What is your credit history: How long you have had a credit history is also important. If you haven’t had one for long, it can still work in your favor by having all of your payments made on time and low balances on your already existing credit.
-Have you made a lot of inquiries lately? This can have an effect on how your score is determined. Try to avoid applying for too many accounts, or lines of credit in a short time.
The best way to keep a good credit score, or start repairing your records, is to pay your bills on time and try to reduce some of the debt that you already have.
If you have damaged your credit score, it will take some time and perseverance, but, you will be able to repair your credit score as they are updated and subject to change over time with new information that is contained in your credit reports.
By: Ken Black
About the Author:
You may be wondering how some people can walk into a lending institution and get credit, or loans, while others that have the same income or job seem to get turned down or receive a higher interest rate. It is all about the risk factor and whether you are a safe risk, or a bad one, when you are being loaned money.
Creditors use a credit scoring system that gives them an idea of whether the person who wants to borrow money is likely to make their repayments, whether they have a history of not making repayments, or are likely to be unable to make the monthly repayments.
These credit scoring systems may go under several names. One of the most widely known credit scoring software applications is the FICO, or the Fair Isaac Corporation, and there are three variations of this software used by the three major credit reporting agencies.
What Exactly Is Credit Scoring?
Credit scoring is collected information about you and your credit history. Contained in a credit report is your bill paying history, as well as how many accounts that you already hold and what type they are. Things such as late payments, any collection actions taken against you, outstanding debts and how long you have had accounts are all considered. All of this information is compared with other consumers that fit the same profile as you to determine the type of risk that you are to the creditor.
The credit scoring system gives you points for each factor and the end result tells the creditor if you are likely to repay your debts. The total amount of your debt is then added up to give you a credit score. Your credit score is an indication on how likely you are to repay your debts and make your monthly repayments when they are due.
Find Out What What’s In Your Credit Report First – since you now know that everything in your credit report is vital to whether you are going to get the line of credit that you are applying for, it would make sense to get your credit report and take a look at what is in it.
Sometimes credit reporting agencies can make mistakes or place something on your report that is inaccurate. By checking your credit records for yourself, you can make sure that everything contained in it is true and accurate.
Before applying for anything, make sure that you obtain your credit report. An amendment in the federal fair credit reporting act now allows a consumer the opportunity to receive a free credit report when you request it, or at least each year.
You obtain your financial summary making a request to one or all of the major credit reporting agencies.
Read through your report and make sure that everything is accurate and you are happy with what has been included in the document. By reading through your report, you will also be able to see if there are good things or bad things listed on your report. This will have a bearing on whether you are likely to be given credit.
Why Credit Scoring Is Used, And Is It Fair?
Credit scoring is based on real information and statistics rather than the personal judgments of another person. Because of this, there is no variation in acceptance of a loan based on other things that are not statistically based facts. Different creditors often use different types of scoring models from agency to agency. Also, different models of the system are used for different lines of credit.
Under the equal credit opportunity act, no scoring systems are allowed to use race, sex, religion, marital status or a person’s country of origin to determine an individuals creditworthiness. Age is sometimes allowed as a scoring characteristic as long as the system is designed properly and those that are over a certain age are treated fairly and given the same opportunities as younger applicants.
If you are not given credit, or your application is denied, the creditor must provide you with the reasons why your application was rejected, either by notification, or by you asking the creditor within two months of being denied. A creditor must also give you a fair reason by law. The credit report system has been designed to make sure that creditors are as fair and objective as possible with those who are applying for financial assistance.
How To Improve Your Credit Score – credit score criterion can differ between creditors, but there are a few fundamentals that can be used to make sure that your credit is in good shape. These include things like:
-Paying your bills on time: Because your history is always taken into account when a credit score is determined, you can improve chances of acceptance by making sure that you have good statistics on paying bills and previous repayments.
-Evaluate your debts: Calculate your outstanding debts and compare them to your existing credit limits. If you are almost at capacity, consider reducing some of your debt before applying for more credit.
-What is your credit history: How long you have had a credit history is also important. If you haven’t had one for long, it can still work in your favor by having all of your payments made on time and low balances on your already existing credit.
-Have you made a lot of inquiries lately? This can have an effect on how your score is determined. Try to avoid applying for too many accounts, or lines of credit in a short time.
The best way to keep a good credit score, or start repairing your records, is to pay your bills on time and try to reduce some of the debt that you already have.
If you have damaged your credit score, it will take some time and perseverance, but, you will be able to repair your credit score as they are updated and subject to change over time with new information that is contained in your credit reports.
By: Ken Black
About the Author:
Ken Black is the owner of Debt Relief Today, a website all about your FICO Score and much more.
Darcey Guisti
robyn_fresh asked:
What is the lowest range that your credit score can be in order to get a decent credit card. I’m talking no annual fee, setup charge, processing fees etc.
Chelsea Licon
What is the lowest range that your credit score can be in order to get a decent credit card. I’m talking no annual fee, setup charge, processing fees etc.
Chelsea Licon
Math Geek asked:
While in college in 2006 I was broke, missed some credit card payments and had one item in collection.
While in college in 2006 I was broke, missed some credit card payments and had one item in collection.
Now I keep zero balance in my three credit cards and my car and house payments are less than 30% of my income before taxes, but my score seems to stay just below 700, going up and down a bit every month.
Any way to increase my credit score without having to wait 7 years for my record to clean up?
Trinidad Seamen
What is a Credit Score?
Imagine that you are walking down the beach in your bathing suit. Too scary? Okay, imagine someone else and a crowd is watching. The crowd holds up signs that read “10″ or “6.5,” depending on how attractive the person in the bathing suit is to them. Crass? Unfair? Subjective?
In the credit game, the crowd judging you is a company called “Fair Isaac” and the numbers range from 375 – 900. This is your credit score-your FICO score which heavily determines your credit attractiveness to a large number of people (i.e., banks, insurance companies, loan companies).
It’s unnerving enough just knowing you’re being judged on anything. But how about being judged on things you have little control over, or not even knowing the criteria upon which you are being judged? It’s like wearing a blue bikini and heels and not knowing that you should be wearing a red bikini and flip flops to score higher.
This is not an exaggeration. For the longest time, no one knew the criteria for credit scoring. Only after enormous public and government pressure, consumers are now allowed to get their credit scores, although the formula used to calculate your score is still as mysterious as the recipe for love.
Your credit score is derived from information accumulated in a credit bureau that issues your credit report. Your score is based on the number of credit accounts you have, your payment history, and your personal information, and is derived from a calculation so complex that there is no exact formula to print. But it is a statistical yardstick projecting whether or not you will default on future credit.
Fair Isaac developed this statistical model (used by all three credit bureaus and most banking institutions), but will not reveal the exact recipe for the model. The company maintains that its model is a proprietary system, and keeping it a secret ensures its continued existence. If it gave away the product, how would Fair Isaac make money? What most people don’t realize is that this credit scoring model is a product sold to lending institutions and, of course, credit bureaus.
This scoring model did not start out to be the industry standard, but since it was the most complete model available when the banking industry was interested in such information, it became an integral part of the credit granting process. The model took years to develop, and Fair Isaac has all kinds of empirical data to back up its accuracy. The lending industry considers this model to be fair and accurate.
Since almost everyone uses it, it implies that everyone is measured by the same yardstick. Many (if not most) American and Canadian consumers are at the mercy of this statistical model.
At the credit scoring conference held by the FTC in July 1999, Fair Isaac gave the opening presentation and talked about some of the things used in calculating consumer credit scores. What I found out was that a lot of what goes into the score calculation is beyond the control of the consumer.
What Exactly Factors into Your Credit Score?
Below is a list of the factors used to score you, listed in order of importance. (Information marked with an asterisk [*] is obtained from information that you provided on an application and is not considered in a credit bureau score.)
1. Major derogatory items on your report (i.e., bankruptcy, collections, foreclosure, slow-pays);
2. Time at present job;
3. Occupation (professionals are given heavy weight);*
4. Time at present address;
5. Ratio of balances to available credit lines (the lower the better);
6. Whether or not you own your home (if you do, this is heavily weighted);*
7. Number of recent inquiries;
8. Age (50+ is the best);
9. Number of credit lines on your report; and
10. The number of years you have had credit in the credit bureau database.
By: Alexander
About the Author:
Imagine that you are walking down the beach in your bathing suit. Too scary? Okay, imagine someone else and a crowd is watching. The crowd holds up signs that read “10″ or “6.5,” depending on how attractive the person in the bathing suit is to them. Crass? Unfair? Subjective?
In the credit game, the crowd judging you is a company called “Fair Isaac” and the numbers range from 375 – 900. This is your credit score-your FICO score which heavily determines your credit attractiveness to a large number of people (i.e., banks, insurance companies, loan companies).
It’s unnerving enough just knowing you’re being judged on anything. But how about being judged on things you have little control over, or not even knowing the criteria upon which you are being judged? It’s like wearing a blue bikini and heels and not knowing that you should be wearing a red bikini and flip flops to score higher.
This is not an exaggeration. For the longest time, no one knew the criteria for credit scoring. Only after enormous public and government pressure, consumers are now allowed to get their credit scores, although the formula used to calculate your score is still as mysterious as the recipe for love.
Your credit score is derived from information accumulated in a credit bureau that issues your credit report. Your score is based on the number of credit accounts you have, your payment history, and your personal information, and is derived from a calculation so complex that there is no exact formula to print. But it is a statistical yardstick projecting whether or not you will default on future credit.
Fair Isaac developed this statistical model (used by all three credit bureaus and most banking institutions), but will not reveal the exact recipe for the model. The company maintains that its model is a proprietary system, and keeping it a secret ensures its continued existence. If it gave away the product, how would Fair Isaac make money? What most people don’t realize is that this credit scoring model is a product sold to lending institutions and, of course, credit bureaus.
This scoring model did not start out to be the industry standard, but since it was the most complete model available when the banking industry was interested in such information, it became an integral part of the credit granting process. The model took years to develop, and Fair Isaac has all kinds of empirical data to back up its accuracy. The lending industry considers this model to be fair and accurate.
Since almost everyone uses it, it implies that everyone is measured by the same yardstick. Many (if not most) American and Canadian consumers are at the mercy of this statistical model.
At the credit scoring conference held by the FTC in July 1999, Fair Isaac gave the opening presentation and talked about some of the things used in calculating consumer credit scores. What I found out was that a lot of what goes into the score calculation is beyond the control of the consumer.
What Exactly Factors into Your Credit Score?
Below is a list of the factors used to score you, listed in order of importance. (Information marked with an asterisk [*] is obtained from information that you provided on an application and is not considered in a credit bureau score.)
1. Major derogatory items on your report (i.e., bankruptcy, collections, foreclosure, slow-pays);
2. Time at present job;
3. Occupation (professionals are given heavy weight);*
4. Time at present address;
5. Ratio of balances to available credit lines (the lower the better);
6. Whether or not you own your home (if you do, this is heavily weighted);*
7. Number of recent inquiries;
8. Age (50+ is the best);
9. Number of credit lines on your report; and
10. The number of years you have had credit in the credit bureau database.
By: Alexander
About the Author:
Rusty Klapp
Jag asked:
What is the best way to check your credit score with all three credit institutions. We are intitled to one free credit report per year right?
Kacie Grismer
What is the best way to check your credit score with all three credit institutions. We are intitled to one free credit report per year right?
Kacie Grismer
COMMON CREDIT SCORE MYTHS
brought to you by
http://www.bestrepairmycredit.com
A lot of credit score myths about fico score ratings get spread around and some of them are just outdated information. Sometimes even lenders can give you the wrong advice and it can get confusing. But the bottom line is bad information can cost you money no matter who you get it from.
Fico score ratings are used for most mortgage lending, which means, you need to know what will hurt or help your credit score points. To make it clear, here are some of the most common credit score myths.
* Checking your credit report will hurt your credit score
Checking your own credit report and credit score counts as a soft inquiry and does not go against your score. However, if anyone else like a lender or credit card company is checking your credit report, this is considered a hard inquiry and will generally knock off about 5 credit score points.
The credit score rating system treats multiple inquiries in a 14-day period as just one inquiry. The system ignores all inquiries made within 30 days prior to the day the credit score is computed. So if you want to minimize the damage from credit inquiries, shop for a loan in that short period of time.
* Closing old accounts will improve your credit report score
Sometimes even lenders will tell you to close your old and inactive accounts as a way for improving your credit report score. In most cases, closing old accounts will actually have the opposite effect with the current credit score rating system.
Canceling old credit accounts can actually lower your credit score because it makes your credit history appear shorter. If you want to reduce your levels of available credit, it’s better to reduce or close new accounts instead. Applying for new credit is more likely to lower your score.
* You need to check more than just FICO score rating
If you ever hear this from anyone, consider it a red flag. All of the three major credit reporting bureaus offer FICO credit score ratings using the formula developed by Fair, Isaac. Even though each one gives the scores a different name you only need a fico score rating from the three major credit reporting bureaus.
At Equifax, the FICO score rating is called the Beacon credit score. At TransUnion, it’s called Empirica. At Experian, it’s known as the Experian/Fair, Isaac Risk Model.
The reason each of the three major credit reporting bureaus will have three different scores is because they don’t all share the same data. So when checking your credit report, just make sure it comes from the three major credit reporting bureaus: Experian, Trans Union and Equifax.
Examine your credit reports from all three major credit reporting bureaus before you apply for a big loan like a mortgage. Fix any errors in all three reports before you shop for a loan because it takes time to correct your credit report.
* Credit counseling will hurt your score
The current FICO credit score rating system ignores any reference to credit counseling that may be in your file. The researchers at Fair, Isaac, the company that created the FICO credit scoring rating system, found that people getting credit counseling didn’t default on their debts any more often than anyone else.
However, any late payments you’ve had with creditors will hurt your credit score. Credit counseling can hurt your ability to get a loan because you probably have had trouble paying creditors.
Some lenders will back away if you are in credit counseling. Others may see it differently, but usually will charge you higher interest rates than if you had perfect credit.
The best way to improve your credit report score is paying your bills on time and paying down credit card debt. Check your credit report regularly for any errors and make sure you don’t fall for these common credit score myths.
By: John Green
About the Author:
brought to you by
http://www.bestrepairmycredit.com
A lot of credit score myths about fico score ratings get spread around and some of them are just outdated information. Sometimes even lenders can give you the wrong advice and it can get confusing. But the bottom line is bad information can cost you money no matter who you get it from.
Fico score ratings are used for most mortgage lending, which means, you need to know what will hurt or help your credit score points. To make it clear, here are some of the most common credit score myths.
* Checking your credit report will hurt your credit score
Checking your own credit report and credit score counts as a soft inquiry and does not go against your score. However, if anyone else like a lender or credit card company is checking your credit report, this is considered a hard inquiry and will generally knock off about 5 credit score points.
The credit score rating system treats multiple inquiries in a 14-day period as just one inquiry. The system ignores all inquiries made within 30 days prior to the day the credit score is computed. So if you want to minimize the damage from credit inquiries, shop for a loan in that short period of time.
* Closing old accounts will improve your credit report score
Sometimes even lenders will tell you to close your old and inactive accounts as a way for improving your credit report score. In most cases, closing old accounts will actually have the opposite effect with the current credit score rating system.
Canceling old credit accounts can actually lower your credit score because it makes your credit history appear shorter. If you want to reduce your levels of available credit, it’s better to reduce or close new accounts instead. Applying for new credit is more likely to lower your score.
* You need to check more than just FICO score rating
If you ever hear this from anyone, consider it a red flag. All of the three major credit reporting bureaus offer FICO credit score ratings using the formula developed by Fair, Isaac. Even though each one gives the scores a different name you only need a fico score rating from the three major credit reporting bureaus.
At Equifax, the FICO score rating is called the Beacon credit score. At TransUnion, it’s called Empirica. At Experian, it’s known as the Experian/Fair, Isaac Risk Model.
The reason each of the three major credit reporting bureaus will have three different scores is because they don’t all share the same data. So when checking your credit report, just make sure it comes from the three major credit reporting bureaus: Experian, Trans Union and Equifax.
Examine your credit reports from all three major credit reporting bureaus before you apply for a big loan like a mortgage. Fix any errors in all three reports before you shop for a loan because it takes time to correct your credit report.
* Credit counseling will hurt your score
The current FICO credit score rating system ignores any reference to credit counseling that may be in your file. The researchers at Fair, Isaac, the company that created the FICO credit scoring rating system, found that people getting credit counseling didn’t default on their debts any more often than anyone else.
However, any late payments you’ve had with creditors will hurt your credit score. Credit counseling can hurt your ability to get a loan because you probably have had trouble paying creditors.
Some lenders will back away if you are in credit counseling. Others may see it differently, but usually will charge you higher interest rates than if you had perfect credit.
The best way to improve your credit report score is paying your bills on time and paying down credit card debt. Check your credit report regularly for any errors and make sure you don’t fall for these common credit score myths.
By: John Green
About the Author:
Carma Bracamontes